In the world of technology, every business aims to be one step ahead – and the first to crack new and exciting innovations.
But just being part of a tech business isn’t enough to ensure you reach your goals, you need to understand how to fully research the market and drive your innovation through new products and services.
That’s why you need to think about research and development (R&D) and the benefits it can bring to your business. At PBA, we understand the need for innovation and are here to help you realise your potential by explaining the uses of R&D.
What R&D means to you
Whenever a company carries out R&D activities, it means they’re undertaking research to develop innovative products and services to offer their customers, and also staying ahead of the competition.
R&D usually makes up the first stage in the development process, with the last stage hopefully being adding those new services to the company’s bottom line.
There are many industries which use R&D, and technology and pharmaceuticals are some of the highest spenders.
However, research and development should not be considered a move for immediate monetary gains, but the first step to a longer period of profitable growth.
When finding a valuable service or product through R&D, your business can progress on to filing patents, copyrights and trademarks making it completely your own.
Even though R&D is beneficial to your bottom line, it needs to be accounted for as an expense. Keeping on top of your research costs and recording them can be a big job.
The team at PBA are more than willing to help you with this, so you can focus on carrying out your research without the worry of the bookkeeping.
The financial aspect
In the UK there are tax reliefs in place for R&D to be carried out by innovative companies such as yours, and there will continue to be in the near future.
In March, Chancellor Rishi Sunak announced in the Spring Statement that R&D spending by the Government is due to increase by £5 billion a year, bringing the total up to £20bn a year by 2024. In doing this, the Government looks to support UK-based R&D further, allowing businesses to claim the tax reliefs ‘based on pure maths’.
Tech businesses looking to make innovations in science and technology are being invited to apply for the reliefs. If your business has less than 500 staff and a turnover of less than 100m euros, you can apply for SME R&D tax relief.
Some of the largest companies in the world have spent billions of dollars on R&D to make sure they are seen as the pioneers of their industry. In 2018 alone, Amazon spent $22.6bn on R&D, almost double the spend of Apple, which in the same year spent £11.6bn.
A helping hand
When it comes to the accounting side of your tech business, PBA knows what’s best and can help you navigate all of the tax reliefs and HMRC returns to help you get the best support you can.
If you have a great idea but don’t know where to start, we can help develop a business plan and support you on the following steps.